The average adult in the United States requires multiple forms of credit to maintain a fully operational household. They may have purchased their home with a mortgage and their vehicle with a loan. They may use short-term loans or financing for medical care and credit cards for unexpected expenses that arise throughout the month.
One aspect of bankruptcy that frightens many people and prevents them from filing despite their financial struggles is the threat of losing all existing lines of credit. Although it is true that revolving lines of credit typically close when someone files for bankruptcy, that does not mean an individual seeking help with their debt must forever forgo the convenience of personal credit.
Instead, they will likely be able to obtain credit again within a few months of their discharge.
Credit card opportunities come swiftly after bankruptcy
It is legal for someone to file for personal bankruptcy more than once, but they will typically need to wait many years before they qualify to file again. Credit card companies are well aware of this rule and therefore anticipate making significant money off of those who have just finished bankruptcy.
Typically the early credit card offers available after bankruptcy require deposits and charge annual fees or high interest rates, they do provide the convenience of having credit and the opportunity to start establishing a new history of paying your monthly balance in full and on time.
Someone who makes a year or two of payments on time will then likely be able to qualify for other, more significant financing options. Car loans and even mortgages can become available within two or three years. The bankruptcy itself will cease affecting your eligibility for credit and your credit score when it comes off of your credit report.
The exact time when that occurs will depend on the type of bankruptcy you pursue. However, while there may be short-term limitations on your credit opportunities, you can expect that personal bankruptcy will not prohibit you from using credit and may even eventually help you maintain better control of the credit that you do utilize.
Learning more about the process and effects of personal bankruptcy can help those hoping to reduce their current debt. You can reach out to the Quinn Law Firm at 814-806-2518 to discuss your situation and the best bankruptcy options.